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Yves here. During the foreclosure crisis, it was annoying to see how Wells Fargo would repeatedly cop a ‘tude of moral superiority in the press, when if anything its chain of title abuses were more egregious by virtue of being better institutionalized. By contrast, Bank of America, which was also grinding up homeowners casually, had acquired garbage barge Countrywide and then by imposing its mindless cost controls, drove out all the people who knew how to run Countrywide’s home built servicing platform…..which was one of its best assets. So as much as there was clearly a big element of design in Bank of America’s predatory conduct, some of it also resulted from incompetence. By contrast, given Wells’ smugness and tightly controlled retail operations, it’s a reasonable assumption that everything that takes place there is institutionalized.
This post demonstrates that despite former Wells CEO John Stumpf’s pious promises under oath before the House and Senate banking committees that aggressive cross selling was a thing of the past, nothing has changed. But perhaps because Stumpf is no longer at Wells, the bank feels no obligation to honor his commitments.
By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street
They have learned nothing.
I walked into my Wells Fargo branch to put my data backup into my safe deposit box, as I’ve been doing for a decade. This routine business turned into a wake-up call about safe deposit boxes and churned up insights into how Wells Fargo conducts to this day its cross-selling efforts: the algo makes them do it!
To clarify, I’m a happy customer. Wells Fargo handles day-to-day banking for me and my vast WOLF STREET media-mogul-empire corporation. The people are nice, and I have not yet noticed any fraudulent accounts in my name.
It doesn’t bother me that every time I call one of the national numbers with a problem or question, I have to swat away their offers of “pre-approved” credit cards, lines of credit, or other high-margin products. Having run a car dealership earlier in my life, I appreciate the art of aggressive cross-selling. However, we never-ever did it over the phone! We waited till we saw the whites of their eyes.
Yet at the counter for safe deposit boxes, I was in for a surprise. The young man – a 30-year-old employee would have looked suspiciously over-age at that branch – checked the computer for my box number. There was a problem. He asked for my driver’s license. He rummaged through a file cabinet, found the signature cards. He conferred with another kid. He came back, embarrassed. Turns out, the fact that I’ve been renting the box for a decade wasn’t in their computer system. So no-go.
I thought: That’s how easy it is to block you from getting into your safe deposit box.
He called over a “personal banker” – a young woman – to “fix” the problem. We trotted off to her desk. She said the bank had “updated” its computer system. My box rental hadn’t made it into the new version. So she got busy on her computer. Took a while. She had to set it up. There were fees and discounts to discuss. There were things I had to read, agree to, and sign. She was just about finished, when she suddenly did a mini double-take of her screen. Everything came to a halt.
“I don’t mean to sell you anything,” she said after a long pause, with an embarrassed smile, “but….”
She could see the whites of my eyes! She turned her computer screen. It was filled with a Wells Fargo credit card promo. You’ve been pre-approved for this great offer, she said. “Your credit must be really good. Not many people get this offer.”
An algorithm had decided it was time to cross-sell; and she had to cross-sell to finish her job. That credit card promo was the next step in the procedure.
The algo that forces employees at the branch and at call centers to cross-sell was designed by humans, after strategic decisions had been made and funded, under the direction of top management at headquarters, such as current CEO Timothy Sloan and former CEO John Stumpf.
This cross-selling push is embedded in the software, is algorithm-driven, and kicks in at the most effective moment.
Even the recent disclosures, settlements, the keel-hauling in California and other states, and further investigations have not motivated Wells Fargo to strip these algos out of its computer system. They’re still there, working hard for your own good.
After she got rid of that promo page, and elegantly handled another topic she wanted to cover, I was finally allowed to get into my safe deposit box.
The next day, I received an email from Wells Fargo and Gallup. It asked for “feedback” on my “recent Wells Fargo visit” and offered me a chance to win $1,000.
Now I was curious. Though I never fill out surveys, I decided to check this out.
Up front, it asked if I spoke “to a banker about opening a NEW account or product,” or about one of my “CURRENT Wells Fargo accounts or products.” Was Wells Fargo trying to figure out if the “banker” did her job and pitched a new account?
After it asked me to rate my “overall satisfaction” with the visit, it listed a series of questions about the employee, whether they did things right the first time, etc. etc. It never once asked about the bank, how it screwed up with the safe deposit box.
And this: “The employee asked questions to identify options for meeting your financial needs.” Should I check “strongly agree” to help the employee out? She deserved it. She was nice. Clearly, the survey is checking on her to see if she did her job and tried to sell me something I didn’t need or want.
Remember, I’d gone to the branch to get into my safe deposit box, and not for retirement planning.
“Did you visit the branch to resolve a problem or error?” Nope. A “problem or error” occurred after I got there.
“Did you work with an employee to establish or confirm your financial priorities?” And “The employee provided products or services that aligned with your current financial needs.”
Again and again, each time couched in slightly different terms, the survey checked on the employee to see if she had been sufficiently aggressive in cross-selling.
The fact that surveys check to see if employees did their job in cross-selling tells me how big the pressure on them still is, even after all the revelations.
These survey results are used to manage employees. They probably get them rubbed in their faces during sales meetings and in performance evaluations. They know they’re being evaluated, not only by the algo-driven computer system at the bank, but also via customer responses, to make sure they push new accounts, credit cards, credit lines, brokerage accounts, and other products.
This is inbred into the bank. It’s part of its management doctrine and computer system. It’s partnering with Gallup to accomplish this. A contract with Gallup isn’t set up at the lower levels. And a few slaps on the wrist aren’t going to change a whole lot. It’s not just Wells Fargo. It’s the industry. It puts banks into the same category as car dealers. So steel yourself when you deal with them (just like you would walking into a dealership).
No bank is “so powerful as to be untouchable,” explained California State Treasurer John Chiang. Read… Wells Fargo Getting Clocked by California: What, No Perp-Walk?